JCT: If the EA fails to deal with an extension of time within the period set out does the employer loose entitlement to L&AD's?

JCT Contracts
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We have a JCT Design and Build Contract and the Employer’s Agent has failed to deal with our application for an extension of time within the 12 week period that is allowed. We are due to complete the Project next week.

Does this failure mean that time is at large and liquidated damages (which are £75K per week) can’t be deducted?

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The English Courts generally will not put time at large because of a failure to certify extensions of time unless there are special circumstances. The Courts approach is that if the CA fails to certify then the court itself (if asked to perform that task) can step into the shoes of the CA and operate the extension of time mechanisms properly and so the contractual provisions do not fall away.

The principle by which time becomes at large was recently commented on by Ramsey J in Bluewater Energy Services BV v Mercon Steel Structures BV and others:

“The principle is of some antiquity and has a surprising effect on the contractual obligations as to the time for completion. As I have found that there is an extension of time mechanism for acts of prevention and I am able… to determine the appropriate adjustments to the… Key Dates, this is not the opportunity to consider the underlying basis for the principle.”

You are therefore unlikely to succeed on this issue. Even if you did you would still have to complete the Works within a reasonable period of time and (if the LAD clause was found to be inoperable) then pay damages at large which could of course be greater than the level of LADs.

I suggest that you operate the mechanism for extensions of time, support your claim with expert evidence and then Adjudicate the issue. Good luck.

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There are two distinct parts to your question.

  1. Time is highly unlikely to be at large. The question to be asked is simply is there a mechanism in the contract that allows time to be adjusted. The answer under JCT is of course yes

  2. Can LDs be charged. The answer here is yes, LDs apply wherever the Contractor does not complete by the Completion Date. If the CD has not been amended as it should then LDs can be charged, albeit they may be recovered when the correct EOT is put in place.